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  • Sylvia Ho

The 10 Commandments of Buying a Home

Updated: May 10, 2022

Buying a new home? Here are 10 tips to help you qualify for a mortgage.

1. Thou shalt not change jobs or quit your job

Sometimes big life changes seem to happen all at once, but do everything you can to avoid this! If your employment is re-verified within 30 days of your closing date, significant changes to your employment status could impact your mortgage approval.

2. Thou shalt not become self-employed

It’s not always straight-forward when proving your income as a self-employed person, and even more challenging if you’ve just started your business recently. Hint: If you are self-employed, mortgage agents can help connect you to the right lender, no matter what your situation!

3. Thou shalt not buy a car, truck or van

Unless you’re paying cash for a new vehicle (in which case, way to go!), whenever you apply for financing, it creates an inquiry on your credit which can potentially decrease your credit score. The increase in liabilities you own can also decrease the amount of mortgage you’re eligible for.

4. Thou shalt not buy furniture

We’re not talking about a $60 ottoman from IKEA, of course. But larger appliances and expensive furniture where deferred payments are involved can affect your borrowing abilities.

5. Thou shalt not spend your down payment money

It sounds like common sense, but this is critical. Making sure this money is available and not tied up elsewhere will ensure closing day goes the way you hoped. Set aside some extra too, in case any surprise expenses arise.

6. Thou shalt not use your credit card excessively

Getting carried away in the excitement of a home purchase is easy, since you’ll likely be upgrading furniture, and maybe even preparing for renovations to make your new home your own. Usage of 70% or more of your credit limit will affect your credit score.

7. Thou shalt not be late on your credit card payments

Closing dates, move-in dates - everything will be happening quickly and it’s a lot to think about. Just don’t let your credit card payment dates slip by - late payments impact your credit score.

8. Thou shalt not omit debts

Now is not the time to hide those skeletons in the closet. Be upfront with debts and liabilities from the very start of the mortgage application process. Trust that lenders are detail-oriented when protecting their assets, and will discover if things haven’t been disclosed.

9. Thou shalt not originate inquiries on your credit check

Get details about what actions initiate inquiries on your credit check and make sure you avoid them. New ones can lead to more documents being required for your approval, which is stressful and time-consuming.

10. Thou shalt not co-sign a loan for anyone

This includes car and student loans too! We all want to do the best we can for family and friends who need our support, but choose your timing wisely. Even though you won’t be responsible for making payments on time and in full, co-signing means you are still responsible for them. This can reduce the mortgage amount you qualify for and creates an inquiry to your credit bureau.

Contact Sylvia today if you have any questions about these financial ‘sins’!

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